TCS Faces Setback as U.S. Supreme Court Rejects Appeal, Upholds $140 Million Damages
Image Source: India Times
Tata Consultancy Services (TCS) encountered a significant setback as the United States Supreme Court dismissed its appeal against a USD 140 million punitive damages order, as confirmed by the company on Tuesday.
The case, initiated by Epic Systems Corporation, centered around allegations of TCS infringing upon intellectual property rights in the development of the ‘Med Mantra’ hospital management system, implemented for a major hospital chain in India back in 2009.
According to TCS’ regulatory filing, the Supreme Court’s rejection of the appeal followed the confirmation by the US Court of Appeals, 7th Circuit, upholding the District Court of Wisconsin’s decision to award punitive damages amounting to USD 140 million. Epic Systems Corporation accused TCS of utilizing documents obtained from its user-web portal inappropriately, leading to the legal dispute.
In response to the Supreme Court’s ruling, TCS announced its intention to record a balance provision of about USD 125 million in its financial statements as an exceptional item for the third quarter and nine months ending December 31, 2023.
Following this development, TCS shares witnessed a slight decline, closing 0.26 per cent lower at Rs 3,510.30 on the BSE.
The resolution of this legal battle marks a significant financial implication for TCS, with the company preparing to adjust its financial statements accordingly in light of the adverse ruling from the U.S. Supreme Court.
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